8-K
Pacific Oak Strategic Opportunity REIT, Inc. (PCOK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
__________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 30, 2025
PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.
(Exact name of registrant specified in its charter)
______________________________________________________
| Maryland | 000-54382 | 26-3842535 |
|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (Commission File Number) | (IRS Employer<br>Identification No.) |
11766 Wilshire Blvd., Suite 1670
Los Angeles, California 90025
(Address of principal executive offices)
Registrant’s telephone number, including area code: (866) 722-6257
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
ITEM 7.01 REGULATION FD DISCLOSURE
Financial Statements - Exhibits 99.1 and 99.2
Pacific Oak SOR (BVI) Holdings, Ltd. (the “BVI”), a wholly-owned subsidiary of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”), completed offerings of Series B, C and D bonds since February 2020. Such offerings were made to investors in Israel and were registered with the Israel Securities Authority. Consequently, the BVI is required to prepare and file with the Israel Securities Authority certain financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”).
On May 30, 2025, the BVI filed IFRS consolidated and separate interim financial statements. The English translations of the IFRS consolidated and separate interim financial statements, as of and for the three months ended March 31, 2025, are attached as Exhibits 99.1 and 99.2, respectively, to this Form 8-K.
The information in this Item 7.01 of Form 8-K and the attached Exhibits 99.1 and 99.2 are furnished to the Securities and Exchange Commission (“SEC”), and shall not be deemed to be “filed” with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
| (d) | Exhibits |
|---|---|
| Ex. | Description |
| 99.1 | Pacific Oak SOR (BVI) Holdings, Ltd. Consolidated Interim Financial Statements as of March 31, 2025 (unaudited) |
| 99.2 | Pacific Oak SOR (BVI) Holdings, Ltd. Separate Interim Financial Statements as of March 31, 2025 (unaudited) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. | ||
|---|---|---|
| Dated: June 2, 2025 | BY: | /S/ PETER MCMILLAN III |
| Peter McMillan III | ||
| Chairman of the Board, President and Director | ||
| (principal financial officer) |
Document
Exhibit 99.1
| This English translation is for convenience purposes only. This is not an official translation and is not binding. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the original Hebrew version. In the event of any discrepancy between the Hebrew version and this translation, the Hebrew version shall prevail. |
|---|
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2025
UNAUDITED
U.S. DOLLARS IN THOUSANDS
INDEX
| Page | |
|---|---|
| Condensed Consolidated Statements of Financial Position | 2 |
| Condensed Consolidated Statements of Profit or Loss | 3 |
| Condensed Consolidated Statements of Equity | 4 |
| Condensed Consolidated Statements of Cash Flows | 5-6 |
| Notes to Interim Condensed Consolidated Financial Statements | 7-14 |
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| March 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | $ | 22,976 | $ | 19,779 | $ | 55,856 |
| Financial assets at fair value through profit or loss | 13,154 | 11,950 | 13,154 | |||
| Rents and other receivables, net | 3,049 | 3,117 | 2,201 | |||
| Prepaid expenses and other assets | 5,597 | 7,836 | 4,179 | |||
| Due from associate | 1,502 | — | — | |||
| Restricted cash | 24,185 | 15,973 | 25,486 | |||
| 70,463 | 58,655 | 100,876 | ||||
| NON-CURRENT ASSETS | ||||||
| Investment properties | 1,157,476 | 1,451,772 | 1,157,945 | |||
| Property plant and equipment - hotel, net | 33,355 | 36,900 | 33,624 | |||
| Goodwill | 949 | 949 | 949 | |||
| Investment in joint ventures | 175,508 | 159,860 | 177,375 | |||
| Restricted cash | 15,083 | 11,899 | 16,890 | |||
| 1,382,371 | 1,661,380 | 1,386,783 | ||||
| TOTAL ASSETS | $ | 1,452,834 | $ | 1,720,035 | $ | 1,487,659 |
| LIABILITIES AND EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Notes payable | $ | 171,030 | $ | 163,595 | $ | 157,316 |
| Bonds payable | 104,421 | 105,244 | 20,653 | |||
| Accounts payable and accrued liabilities | 21,939 | 24,774 | 27,996 | |||
| Due to affiliate | 21,361 | 11,702 | 12,660 | |||
| Other liabilities | 17,048 | 19,388 | 18,516 | |||
| 335,799 | 324,703 | 237,141 | ||||
| NON-CURRENT LIABILITIES | ||||||
| Notes payable, net | 372,310 | 474,768 | 388,582 | |||
| Bonds payable, net | 188,483 | 191,605 | 298,741 | |||
| Lease obligation | 9,354 | 9,201 | 8,912 | |||
| Other liabilities | 25,314 | 14,462 | 26,380 | |||
| 595,461 | 690,036 | 722,615 | ||||
| TOTAL LIABILITIES | 931,260 | 1,014,739 | 959,756 | |||
| EQUITY | ||||||
| Owner's net equity | 517,521 | 694,606 | 523,989 | |||
| Non-controlling interests | 4,053 | 10,690 | 3,914 | |||
| TOTAL EQUITY | 521,574 | 705,296 | 527,903 | |||
| TOTAL LIABILITIES AND EQUITY | $ | 1,452,834 | $ | 1,720,035 | $ | 1,487,659 |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
| May 28, 2025 | /s/ Ryan Schluttenhofer | /s/ Jodi Kremerman | /s/ Keith David Hall |
|---|---|---|---|
| Date of approval of | Schluttenhofer, Ryan | Kremerman, Jodi | Hall, Keith David |
| financial statements | Chief Accounting Officer | Chairman of Board of Directors | Chief Executive Officer |
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
| Three months ended March 31, | Year ended December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| Revenues and other income: | ||||||
| Rental income | $ | 26,425 | $ | 28,726 | $ | 112,567 |
| Tenant reimbursements | 3,008 | 3,121 | 11,672 | |||
| Hotel revenues | 2,885 | 2,804 | 9,061 | |||
| Other operating income | 464 | 472 | 1,899 | |||
| Total revenues and other income | 32,782 | 35,123 | 135,199 | |||
| Expenses: | ||||||
| Operating, maintenance, and management fees | (11,678) | (11,288) | (48,572) | |||
| Real estate taxes and insurance | (5,481) | (6,476) | (23,410) | |||
| Hotel expenses | (1,737) | (1,876) | (6,877) | |||
| Total expenses | (18,896) | (19,640) | (78,859) | |||
| Gross profit | 13,886 | 15,483 | 56,340 | |||
| Fair value adjustment of investment properties, net | (2,545) | (51,800) | (123,140) | |||
| Depreciation | (274) | (280) | (1,178) | |||
| Equity in loss of unconsolidated joint ventures | (1,867) | (4,356) | (49,226) | |||
| Asset management fees | (3,665) | (4,102) | (15,622) | |||
| Impairment loss - hotel | — | (3,454) | (6,400) | |||
| General and administrative expenses | (1,598) | (1,758) | (7,425) | |||
| Operating profit (loss) | 3,937 | (50,267) | (146,651) | |||
| Finance expenses, net | (16,143) | (16,773) | (71,892) | |||
| Foreign currency transaction gain (loss), net | 5,984 | 3,913 | (3,156) | |||
| Other income | 843 | 455 | 1,764 | |||
| Finance loss from financial assets at fair value through profit or loss | — | (15,272) | (11,995) | |||
| Loss on extinguishment of debt | — | — | (6,033) | |||
| Net loss before income taxes | $ | (5,379) | $ | (77,944) | $ | (237,963) |
| Income tax provision | (890) | — | (10,000) | |||
| Net loss | $ | (6,269) | $ | (77,944) | $ | (247,963) |
| Net loss attributable to owner | $ | (6,468) | $ | (77,560) | $ | (243,177) |
| Net income (loss) attributable to non-controlling interests | 199 | (384) | (4,786) | |||
| Net loss | $ | (6,269) | $ | (77,944) | $ | (247,963) |
| Total comprehensive loss | $ | (6,269) | $ | (77,944) | $ | (247,963) |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
| Owner contributions | Retained earnings | Paid-in Capital resulting from transactions with non-controlling interests | Owner's net equity | Non-controlling interests | Total equity | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Unaudited | ||||||||||||
| U.S. dollars in thousands | ||||||||||||
| Balance as of January 1, 2025 | $ | 693,554 | $ | (212,639) | $ | 43,074 | $ | 523,989 | $ | 3,914 | $ | 527,903 |
| Net (loss) income | — | (6,468) | — | (6,468) | 199 | (6,269) | ||||||
| Total comprehensive (loss) income | — | (6,468) | — | (6,468) | 199 | (6,269) | ||||||
| Noncontrolling interests distribution | — | — | — | — | (60) | (60) | ||||||
| Balance as of March 31, 2025 | $ | 693,554 | $ | (219,107) | $ | 43,074 | $ | 517,521 | $ | 4,053 | $ | 521,574 |
| Owner contributions | Retained earnings | Paid-in Capital resulting from transactions with non-controlling interests | Owner's net equity | Non-controlling interests | Total equity | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Unaudited | ||||||||||||
| U.S. dollars in thousands | ||||||||||||
| Balance as of January 1, 2024 | $ | 693,554 | $ | 35,538 | $ | 43,074 | $ | 772,166 | $ | 10,724 | $ | 782,890 |
| Net loss | — | (77,560) | — | (77,560) | (384) | (77,944) | ||||||
| Total comprehensive loss | — | (77,560) | — | (77,560) | (384) | (77,944) | ||||||
| Noncontrolling interests’ contributions | — | — | — | — | 350 | 350 | ||||||
| Balance as of March 31, 2024 | $ | 693,554 | $ | (42,022) | $ | 43,074 | $ | 694,606 | $ | 10,690 | $ | 705,296 |
| Owner contributions | Retained earnings | Paid-in Capital resulting from transactions with non-controlling interests | Owner's net equity | Non-controlling interests | Total equity | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Audited | ||||||||||||
| U.S. dollars in thousands | ||||||||||||
| Balance as of January 1, 2024 | $ | 693,554 | $ | 35,538 | $ | 43,074 | $ | 772,166 | $ | 10,724 | $ | 782,890 |
| Net loss | — | (243,177) | — | (243,177) | (4,786) | (247,963) | ||||||
| Total comprehensive loss | — | (243,177) | — | (243,177) | (4,786) | (247,963) | ||||||
| Distributions to owner | — | (5,000) | — | (5,000) | — | (5,000) | ||||||
| Non-controlling interest contributions | — | — | — | — | 584 | 584 | ||||||
| Non-controlling interests distributions | — | — | — | — | (2,608) | (2,608) | ||||||
| Balance as of December 31, 2024 | $ | 693,554 | $ | (212,639) | $ | 43,074 | $ | 523,989 | $ | 3,914 | $ | 527,903 |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three months ended <br>March 31, | Year ended December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| Cash Flows from Operating Activities: | ||||||
| Net loss | $ | (6,269) | $ | (77,944) | $ | (247,963) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Equity in loss of joint ventures, net | 1,867 | 4,356 | 49,226 | |||
| Fair value adjustment on investment properties, net | 2,545 | 51,800 | 123,140 | |||
| Depreciation | 274 | 280 | 1,178 | |||
| Deferred rent | 484 | (35) | (859) | |||
| Credit loss on financial assets | 684 | 406 | 2,682 | |||
| Finance expenses | 16,143 | 16,773 | 71,892 | |||
| Foreign currency transaction (loss) gain, net | (5,984) | (3,913) | 3,156 | |||
| Other income | (842) | (455) | (1,764) | |||
| Finance loss from financial assets at fair value through profit or loss | — | 15,272 | 11,995 | |||
| Impairment loss - hotel | — | 3,454 | 6,400 | |||
| Income tax provision | 890 | — | 10,000 | |||
| Loss on extinguishment of debt | — | — | 6,033 | |||
| 9,792 | 9,994 | 35,116 | ||||
| Changes in assets and liabilities: | ||||||
| Restricted cash | 4,405 | 13,715 | (154) | |||
| Rents and other receivables, net | (1,532) | (332) | (1,517) | |||
| Prepaid expenses and other assets | (1,421) | 1,296 | 485 | |||
| Accounts payable and accrued liabilities | (3,157) | (3,620) | (1,697) | |||
| Due to affiliates | 701 | 2,839 | 4,676 | |||
| Other liabilities | (793) | (4,062) | 7,264 | |||
| (1,797) | 9,836 | 9,057 | ||||
| Net cash provided by operating activities | 7,995 | 19,830 | 44,173 | |||
| Cash Flows from Investing Activities: | ||||||
| Improvements to investment properties | (4,265) | (9,862) | (27,512) | |||
| Proceeds from sales of investment properties, net | 1,351 | 1,498 | 242,347 | |||
| Advance to associate | (1,502) | — | — | |||
| Funding for development obligations | (1,855) | (2,250) | (11,540) | |||
| Other income received | 842 | 630 | 1,764 | |||
| Taxes paid related to sales of investment properties | — | — | (10,000) | |||
| Contributions to joint ventures | — | (15,634) | (79,530) | |||
| Distribution of capital from joint venture | — | — | 1,497 | |||
| Proceeds from the sale of investments in financial assets at fair value through profit or loss, net | — | 14,309 | 16,379 | |||
| Purchase of interest rate caps | — | (941) | (1,447) | |||
| Proceeds from interest rate caps | — | 1,478 | 2,813 | |||
| Payments on foreign currency derivatives, net | — | (478) | (478) | |||
| Dividend income received from financial assets at fair value through profit or loss | — | 78 | 81 | |||
| Proceeds for development obligations | — | 4 | 16,461 | |||
| Net cash (used in) provided by investing activities | (5,429) | (11,168) | 150,835 |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
| Three months ended <br>March 31, | Year ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| U.S. dollars in thousands | ||||||||||||||
| Cash Flows from Financing Activities: | ||||||||||||||
| Principal payments on notes and bonds payable | $ | (24,397) | $ | (108,996) | $ | (348,667) | ||||||||
| Payments on deferred financing costs and extinguishment of debt | (167) | (1,422) | (9,813) | |||||||||||
| Interest paid | (19,055) | (16,095) | (60,399) | |||||||||||
| Proceeds from loan from owner | 8,000 | — | — | |||||||||||
| Noncontrolling interests’ distributions | (60) | — | (2,608) | |||||||||||
| Release of restricted cash for debt service obligations | 282 | 20,556 | 13,962 | |||||||||||
| Noncontrolling interests’ contributions | — | 350 | 584 | |||||||||||
| Proceeds from notes and bonds payable | — | 21,562 | 179,787 | |||||||||||
| Distributions to owner | — | (675) | (6,554) | |||||||||||
| Net cash used in financing activities | (35,397) | (84,720) | (233,708) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (49) | 745 | (536) | |||||||||||
| Net decrease in cash and cash equivalents | (32,880) | (75,313) | (39,236) | |||||||||||
| Cash and cash equivalents, beginning of period | 55,856 | 95,092 | 95,092 | |||||||||||
| Cash and cash equivalents, end of period | $ | 22,976 | $ | 19,779 | $ | 55,856 | Supplemental Disclosure of Noncash Activities: | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||
| Accrued development obligations | $ | 9,644 | $ | 8,967 | $ | 12,135 | ||||||||
| Asset management fee reimbursement payable to owner | $ | 13,938 | $ | 9,284 | $ | 12,006 | ||||||||
| Deposit applied to sale of investment property | $ | — | $ | — | $ | 9,472 | ||||||||
| Distribution payable to owner | $ | — | $ | 1,075 | $ | — |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: GENERAL INFORMATION
a.These financial statements have been prepared in a condensed format as of March 31, 2025, and for the three months period then ended ("interim condensed consolidated financial statements"). These interim condensed consolidated financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2024, and for the year then ended and the accompanying notes ("annual financial statements").
The Company and its subsidiaries (the "Group") operate in the investment real estate segment in the United States, which includes mainly investment in office and residential real estate and undeveloped lands. In addition, the Company invests in real estate equity securities. The Company has three reporting segments: 1) strategic opportunistic properties 2) residential homes and 3) hotel.
As of March 31, 2025, the Company consolidated nine office complexes, encompassing, in the aggregate, approximately 3.2 million rentable square feet and these properties were 66% occupied. In addition, the Company owned one residential home portfolio consisting of 2,083 residential homes, and one apartment property containing 609 units, which were 93% and 91% occupied, respectively. The Company also owned one hotel property with 196 rooms, four investments in undeveloped land with approximately 247 developable acres, and one office/retail development property, three investments in unconsolidated joint ventures and one financial asset at fair value through profit or loss.
Due to elevated interest rates, the Company may experience restrictions in liquidity based on certain financial covenant requirements, the Company’s inability to refinance maturing debt in part or in full as it comes due and higher debt service costs and reduced yields relative to cost of debt. If the Company is unable to find alternative credit arrangements or other funding in a high interest environment, the Company’s business needs may not be adequately met. Based on interest rates as of March 31, 2025, if interest rates were 100 basis points higher or lower during the three months ending March 31, 2025, the annualized interest expense on our variable rate debt would increase or decrease by $2.8 million and $3.1 million, respectively.
In addition, tenants and potential tenants of the Company’s properties may be adversely impacted by inflation and rising interest rates, which could negatively impact the Company’s tenants’ ability to pay rent and the demand for the Company’s properties. Such adverse impacts on the Company’s tenants may cause increased vacancies, which may add pressure to lower rents and increase the Company’s expenditures for re-leasing.
b. As of March 31, 2025, the Company had a working capital shortfall amounting to $265.3 million, primarily attributed to loans maturing in the year following the date of the statement of financial position. In addition, on January 31, 2026, the Company has a principal repayment of Series B bonds amounting to $104.4 million and related interest of $2.3 million. The Company has positive cash flow from operations and intends to refinance, execute options to extend or pay down as they come due or issue another bond series and loans and does not anticipate any challenges in refinancing such loans given the Company’s relationship with third-party lenders and its past experience placing debt on its properties. In addition, the Company expects to generate cash flow from additional asset sales and financial securities during 2025. There are no limitations on the Company’s ability to withdraw funds from the Company’s subsidiaries. Accordingly, and based on the projected cash flow prepared by management under various scenarios, the Company and the board of directors expect to generate the resources necessary to repay existing and expected liabilities of the Company in the foreseeable future.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
c. In March 2025, S&P Global Ratings Maalot announced an update to the rating for the Series B and D bonds from to ilA+ to ilA and the Series C bonds from ilAA to ilAA-. As a result of the downgrades, the annual interest rate for the Series B and D bonds increased to 4.43% and 10.0%, respectively. According to the Deed of Trust of Series C there was no change in the interest rate. Additionally, as a result of not meeting December 31, 2024 minimum equity covenants for the Series D bonds, the annual interest rate is increased by 0.50% to 10.50%.
NOTE 2: SIGNIFICANT ACCOUNTING POLICY
Basis of presentation of the interim condensed consolidated financial statements:
The interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting", and in accordance with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements.
NOTE 3: INVESTMENT IN JOINT VENTURES
As of March 31, 2025, the Company’s investment in joint ventures was composed of the following (dollars in thousands):
| Properties as of March 31, 2025 | Investment Balance as of | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, | December 31, 2024 | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Joint Venture | Location | Ownership % | (Unaudited) | (Audited) | ||||||||||
| 110 William Joint Venture | 1 | New York, New York | (1) | $ | 140,773 | $ | 123,434 | $ | 142,899 | |||||
| Pacific Oak Opportunity Zone Fund I | 4 | Various | 47.0% | 34,735 | 36,426 | 34,476 | ||||||||
| 353 Sacramento Joint Venture (2) | 1 | San Francisco, California | 55.0% | — | — | — | ||||||||
| $ | 175,508 | $ | 159,860 | $ | 177,375 |
_____________________
(1)As of December 31, 2024, the Company owned 77.5% of preferred interest and 100% of common interest in the 110 William Joint Venture.
(2)The Company’s investment in the 353 Sacramento Joint Venture is limited to the investment balance and the Company does not guarantee any debt or other obligations associated with the joint venture.
The equity in profit (loss) of joint ventures for the three months ended March 31, 2025 and 2024 and the year ended December 31, 2024 was as follows (in thousands):
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Three Months Ended March 31, | Year ended December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| (Unaudited) | (Audited) | |||||
| 110 William Joint Venture | $ | (2,126) | $ | (4,713) | $ | (49,066) |
| Pacific Oak Opportunity Zone Fund I | 259 | 357 | (160) | |||
| Equity in loss of unconsolidated joint ventures | $ | (1,867) | $ | (4,356) | $ | (49,226) |
110 William Joint Venture:
Summarized information about the statements of financial position and the statements of profit or loss of Pacific Oak SOR SREF III 110 William, LLC (100%) (in thousands):
| March 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| (Unaudited) | (Audited) | |||||
| Current assets | $ | 8,245 | $ | 8,787 | $ | 8,676 |
| Non-current assets (investment property) | 492,095 | 390,864 | 464,900 | |||
| Current liabilities | 31,661 | 3,496 | 23,824 | |||
| Non-current liabilities | 302,048 | 248,592 | 277,558 | |||
| Equity | 166,631 | 147,563 | 172,194 | |||
| Equity attributable to equity holders of the Company (Based on the waterfall mechanism) | $ | 140,773 | $ | 123,434 | $ | 142.899 |
| Three months ended March 31, | Year ended December 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2024 | ||||
| (Unaudited) | (Audited) | |||||
| Revenues | $ | 3,582 | $ | 4,086 | $ | 15,890 |
| Gross loss | (1,089) | (3) | (93) | |||
| Operating (loss) profit *) | (698) | 24 | (24,854) | |||
| Net loss *) | (5,563) | (4,583) | (43,834) | |||
| Share of equity in loss from joint venture (Based on the waterfall mechanism) | (2,126) | (4,713) | (49,066) | |||
| *) Includes revaluation of investment properties | $ | (424) | $ | — | $ | (24,748) |
Pacific Oak Opportunity Zone Fund I:
Summarized information about the statements of financial position and the statements of profit or loss of Pacific Oak Opportunity Zone Fund 1, LLC (100%) (in thousands):
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Three months ended March 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| (Unaudited) | (Audited) | |||||
| Current assets | $ | 2,265 | $ | 2,368 | $ | 1,970 |
| Non-current assets (investment property) | 129,132 | 127,461 | 129,133 | |||
| Current liabilities | 786 | 1,931 | 828 | |||
| Non-current liabilities | 57,782 | 51,002 | 57,837 | |||
| Equity | 72,829 | 76,896 | 72,438 | |||
| Equity attributable to equity holders of the Company (Based on the waterfall mechanism) | $ | 34,735 | $ | 36,426 | $ | 34,476 |
| Three months ended March 31, | Year ended December 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2024 | ||||
| (Unaudited) | (Audited) | |||||
| Revenues | $ | 2,138 | $ | 2,283 | $ | 9,184 |
| Gross profit | 1,333 | 1,858 | 7,687 | |||
| Operating profit *) | 1,223 | 1,235 | 1,915 | |||
| Net profit (loss) *) | 548 | 831 | (479) | |||
| Share of equity in profit (loss) from joint venture (Based on the waterfall mechanism) | 259 | 357 | (160) | |||
| *) Includes revaluation of investment properties | $ | — | $ | 361 | $ | (1,359) |
The Company does not attach the financial statements related to the investment in joint ventures, as the reports do not add more information to the contained above.
NOTE 4: FINANCIAL INSTRUMENTS
The following were the fair values of the Company’s financial instruments as of March 31, 2025 and 2024, and December 31, 2024 (in thousands):
| March 31, | December 31, | ||||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | |||||
| Unaudited | Audited | ||||||
| Notes payable | $ | 538,889 | $ | 631,653 | $ | 540,191 | |
| Series Bonds | $ | 269,045 | $ | 304,552 | $ | 329,141 |
The Series B bonds contain the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 475 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million; and (iv) the consolidated scope of the projects for development of the Company shall not exceed 10% of the adjusted balance. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series B bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) the
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Adjusted NOI was $54.3 million for the trailing twelve months ended March 31, 2025; and (iv) the consolidated scope of projects was $0 as of March 31, 2025.
The Series C bonds contain the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) and the Loan to Collateral Ratio shall not exceed a rate of 75%. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series C bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) and the Loan to Collateral Ratio as of March 31, 2025 was 49%.
The Series D bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series D bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) and the Adjusted NOI was $54.3 million for the trailing twelve months ended March 31, 2025.
The Company's investments in real estate equity securities are carried at their estimated fair value based on quoted market prices (Level 1) for the securities. Unrealized gains and losses are reported in finance loss from financial assets at fair value through profit or loss.
NOTE 5: SEGMENT INFORMATION
The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and asses its performance. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented to the CODM. The selected financial information for the reporting segments as of and for the three months ended March 31, 2025 and 2024 and as of and the year ended December 31, 2024 is as follows (in thousands):
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Unaudited) | ||||||||
| Investment properties | $ | 763,375 | $ | 394,101 | $ | — | $ | 1,157,476 |
| Property plant and equipment - hotel, net | $ | — | $ | — | $ | 33,355 | $ | 33,355 |
| Total assets | $ | 1,008,601 | $ | 407,833 | $ | 36,400 | $ | 1,452,834 |
| Total liabilities | $ | 710,236 | $ | 197,344 | $ | 23,680 | $ | 931,260 |
| Three months ended March 31, 2025 | ||||||||
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Unaudited) | ||||||||
| Total revenues and other income | $ | 20,825 | $ | 9,072 | $ | 2,885 | $ | 32,782 |
| Gross profit | $ | 9,896 | $ | 2,842 | $ | 1,148 | $ | 13,886 |
| Finance expenses, net | $ | 13,309 | $ | 2,281 | $ | 553 | $ | 16,143 |
| March 31, 2024 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Unaudited) | ||||||||
| Investment properties | $ | 1,051,423 | $ | 400,349 | $ | — | $ | 1,451,772 |
| Property plant and equipment - hotel, net | $ | — | $ | — | $ | 36,900 | $ | 36,900 |
| Total assets | $ | 1,262,730 | $ | 410,789 | $ | 46,516 | $ | 1,720,035 |
| Total liabilities | $ | 787,098 | $ | 201,670 | $ | 25,971 | $ | 1,014,739 |
| Three months ended March 31, 2024 | ||||||||
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Unaudited) | ||||||||
| Total revenues and other income | $ | 23,163 | $ | 9,156 | $ | 2,804 | $ | 35,123 |
| Gross profit | $ | 10,289 | $ | 4,266 | $ | 928 | $ | 15,483 |
| Finance expenses, net | $ | 13,833 | $ | 2,370 | $ | 570 | $ | 16,773 |
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Audited) | ||||||||
| Investment properties | $ | 762,350 | $ | 395,595 | $ | — | $ | 1,157,945 |
| Property plant and equipment - hotel, net | $ | — | $ | — | $ | 33,624 | $ | 33,624 |
| Total assets | $ | 1,043,333 | $ | 408,875 | $ | 35,451 | $ | 1,487,659 |
| Total liabilities | $ | 737,527 | $ | 198,764 | $ | 23,465 | $ | 959,756 |
| Year ended December 31, 2024 | ||||||||
| Strategic Opportunistic Properties | Residential Homes | Hotel | Total | |||||
| (Audited) | ||||||||
| Total revenues and other income | $ | 90,938 | $ | 35,200 | $ | 9,061 | $ | 135,199 |
| Gross profit | $ | 38,015 | $ | 16,141 | $ | 2,184 | $ | 56,340 |
| Finance expenses, net | $ | 60,252 | $ | 9,371 | $ | 2,269 | $ | 71,892 |
NOTE 6: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
Series B Bond Payment
In January 2025, the Company made a principal installment payment of 75.3 million Israeli new Shekels ($21.0 million as of January 31, 2025) in connection with the Company’s Series B bonds. Subsequent to this installment payment, one Series B Bond installment remain, due on January 31, 2026.
Loan Agreement
In February 2025, the Company entered into an $8.0 million unsecured loan agreement with Pacific Oak Strategic Opportunity Limited Partnership, the Company’s sole owner. The loan carries an annual interest rate of 12% and has a maturity in May 2025, with an available 90-day extension exercisable by the Company.
NOTE 7: SUBSEQUENT EVENTS
The Company evaluates subsequent events up until the date the interim condensed consolidated financial statements are issued.
Crown Pointe Mortgage Loan
On April 21, 2025, in light of the decision of the Company to market and sell the property, the borrowing company and the current lender in the property entered into a forbearance agreement in which the parties agreed to postpone the final repayment date of the loan in the amount of $54.7 million until September 2025 with the possibility of an additional extension, at the sole discretion of the lender, until December 2025.
PACIFIC OAK SOR (BVI) HOLDINGS LTD.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As part of the aforesaid agreement, it was agreed that during the term of the agreement, the expiration of the final repayment date would not constitute an event of default of the loan, that the borrowing company would pay the monthly interest payments in accordance with the provisions of the loan agreement, and that a cash sweep mechanism would be activated.
110 William Joint Venture Loan
On May 9, 2025, the 110 William Joint Venture entered into a loan agreement for $21.0 million, of which $13.4 million was funded at closing. The loan has an initial maturity date of July 5, 2026 with two annual extensions available and has an annual interest rate of one-month SOFR plus 15.0%. Additionally, subsequent to March 31, 2025, the 110 William Joint Venture successfully delivered a tranche of office space to a major tenant and as a result, was entitled to a lump sum payment of $15.3 million from the tenant.
14
Document
Exhibit 99.2
| This English translation is for convenience purposes only. This is not an official translation and is not binding. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the original Hebrew version. In the event of any discrepancy between the Hebrew version and this translation, the Hebrew version shall prevail. |
|---|
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
PRESENTATION OF SEPARATE FINANCIAL DATA FROM THE
CONSOLIDATED FINANCIAL STATEMENTS ATTRIBUTABLE TO THE COMPANY
March 31, 2025 (Unaudited)
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
PRESENTATION OF SEPARATE FINANCIAL DATA
FROM THE CONSOLIDATED FINANCIAL STATEMENTS
ATTRIBUTABLE TO THE COMPANY
AS OF MARCH 31, 2025
(UNAUDITED)
U.S. DOLLARS IN THOUSANDS
INDEX
| Page | |
|---|---|
| Special Report Presented Pursuant to Regulation 38d | 2 |
| Financial Information from the Consolidated Statements of Financial Position Attributable to the Company | 3 |
| Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company | 4 |
| Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company | 5 |
| Additional Information | 6 |
Special Report in accordance with Regulation 38d
Financial Information and Financial Data from the
Consolidated Financial Statements Attributable to the Company
Below is separate financial information and financial data attributable to the Company from the Group's consolidated financial statements as of March 31, 2025, published as part of the periodic reports ("consolidated financial statements"), presented in accordance with Regulation 38d to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Financial Position Attributable to the Company
| March 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| ASSETS | ||||||
| NON-CURRENT ASSETS | ||||||
| Investments in investees | $ | 820,977 | $ | 1,000,660 | $ | 849,492 |
| Restricted cash | 4,655 | 508 | 10,109 | |||
| 825,632 | 1,001,168 | 859,601 | ||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | 615 | 385 | 704 | |||
| Restricted cash | 8,540 | 4,719 | 3,252 | |||
| 9,155 | 5,104 | 3,956 | ||||
| TOTAL ASSETS | $ | 834,787 | $ | 1,006,272 | $ | 863,557 |
| EQUITY | $ | 517,521 | $ | 694,606 | $ | 523,989 |
| NON-CURRENT LIABILITIES | ||||||
| Bonds payable, net | 188,483 | 191,605 | 298,741 | |||
| CURRENT LIABILITIES | ||||||
| Accounts payable and accrued liabilities | 3,782 | 4,458 | 8,208 | |||
| Bonds payable | 104,421 | 105,244 | 20,653 | |||
| Due to owner | 20,580 | 10,359 | 11,966 | |||
| 128,783 | 120,061 | 40,827 | ||||
| TOTAL LIABILITIES | 317,266 | 311,666 | 339,568 | |||
| TOTAL EQUITY AND LIABILITIES | $ | 834,787 | $ | 1,006,272 | $ | 863,557 |
The accompanying notes are an integral part of the condensed interim financial data.
| May 28, 2025 | /s/ Ryan Schluttenhofer | /s/ Jodi Kremerman | /s/ Keith David Hall |
|---|---|---|---|
| Date of approval of | Schluttenhofer, Ryan | Kremerman, Jodi | Hall, Keith David |
| financial statements | Chief Accounting Officer | Chairman of Board of Directors | Chief Executive Officer |
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company
| Three months ended March 31, | Year ended December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| Share of loss from investees, net | $ | (2,396) | $ | (71,841) | $ | (190,035) |
| Advisory fees to affiliate | (2,657) | (3,087) | (11,593) | |||
| General and administrative expenses | (491) | (605) | (2,645) | |||
| Operating loss | (5,544) | (75,533) | (204,273) | |||
| Finance expense | (7,018) | (6,248) | (30,720) | |||
| Finance income | 110 | 308 | 1,005 | |||
| Loss on extinguishment of debt | — | — | (6,033) | |||
| Foreign currency transaction gain (loss), net | 5,984 | 3,913 | (3,156) | |||
| Net loss | $ | (6,468) | $ | (77,560) | $ | (243,177) |
| Total comprehensive loss | $ | (6,468) | $ | (77,560) | $ | (243,177) |
The accompanying notes are an integral part of the condensed interim financial data.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company
| Three months ended March 31, | Year ended <br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| Cash flows from operating activities | ||||||
| Net loss | $ | (6,468) | $ | (77,560) | $ | (243,177) |
| Adjustments to reconcile net loss to net cash used in by operating activities: | ||||||
| Share of loss from investees | 2,396 | 71,841 | 190,035 | |||
| Finance expense | 7,018 | 6,248 | 30,720 | |||
| Distribution from (to) investees, net | 12,304 | (28,255) | 49,109 | |||
| Foreign currency transaction adjustments, net | (5,984) | (3,913) | 3,156 | |||
| Loss on extinguishment of debt | — | — | 6,033 | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts payable and accrued liabilities | 123 | 192 | (247) | |||
| Restricted cash for operational expenditures | (371) | 9,571 | (3,389) | |||
| Due to affiliates | 614 | 1,496 | 3,982 | |||
| Net cash provided by (used in) operating activities | 9,632 | (20,380) | 36,222 | |||
| Cash flows from investing activities | ||||||
| Distributions from investees, net | 13,813 | 91,670 | 47,280 | |||
| Payments on foreign currency derivatives, net | — | (478) | (478) | |||
| Net cash provided by (used in) investing activities | 13,813 | 91,192 | 46,802 | |||
| Cash flows from financing activities | ||||||
| Payment on bonds payable | (21,184) | (106,021) | (253,229) | |||
| Payments of deferred financing costs | (231) | (101) | (4,850) | |||
| Interest paid | (10,331) | (6,434) | (21,990) | |||
| Release of restricted cash for debt service obligations | 261 | 20,556 | 26,590 | |||
| Proceeds from loan from owner | 8,000 | — | — | |||
| Proceeds from bonds payable | — | — | 156,746 | |||
| Distributions to owner | — | (675) | (6,554) | |||
| Net cash used in by financing activities | (23,485) | (92,675) | (103,287) | |||
| Effect of exchange rate changes on cash and cash equivalents | (49) | 745 | (536) | |||
| Decrease in cash | (89) | (21,118) | (20,799) | |||
| Cash, beginning of the period | 704 | 21,503 | 21,503 | |||
| Cash, end of the period | $ | 615 | $ | 385 | $ | 704 |
| Supplemental Disclosure of Noncash Activities: | ||||||
| Asset management fee reimbursement payable to owner | $ | 13,938 | $ | 9,284 | $ | 11,961 |
| Distribution payable to owner | $ | — | $ | 1,075 | $ | — |
The accompanying notes are an integral part of the condensed interim financial data.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
Additional Information
U.S. dollars in thousands
NOTE 1: BASIS OF PREPARATION
a.Separate financial information is prepared in a condensed format as of March 31, 2025 and for the three months then ended, in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.
Please refer to the separate financial information in this regard to the financial information on the annual financial statements of the Company as of December 31, 2024 and for the year then ended, and the information accompanying notes (hereinafter - the annual consolidated financial statements).
b.As of March 31, 2025, the Company had a working capital shortfall amounting to $119.6 million, primarily attributed to the debentures principal payment maturing in the year following the date of the statement of financial position. In addition, on January 31, 2026, the Company has a principal repayment of Series B bonds amounting to $106.8 million. The Company has positive cash flow from operations and intends to refinance and execute options to extend or pay down as they come due or issue another bond series and loans and does not anticipate any challenges in refinancing such loans given the Company’s relationship with third-party lenders and its past experience placing debt on its properties. In addition, the Company expects to generate cash flow from additional asset sales and financial securities during 2025. There are no limitations on the Company’s ability to withdraw funds from the Company’s subsidiaries. Accordingly, and based on the projected cash flow prepared by management under various scenarios, the Company and the board of directors expect to generate the resources necessary to repay existing and expected liabilities of the Company in the foreseeable future.
c.In March 2025, S&P Global Ratings Maalot announced an update to the rating for the Series B and D bonds from to ilA+ to ilA and the Series C bonds from ilAA to ilAA-. As a result of the downgrades, the annual interest rate for the Series B and D bonds increased to 4.43% and 10.0%, respectively. According to the Deed of Trust of Series C there was no interest increase. Additionally, as a result of not meeting December 31, 2024 minimum equity covenants for the Series D bonds, the annual interest rate is increased by 0.50% to 10.50%.
NOTE 2: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
Israeli Bond Financings
As of March 31, 2025, the Company had bonds outstanding of 1.1 billion Israeli new shekels ($300.5 million as of March 31, 2025) (“Series Bonds”), of which 142.0 million Israeli new shekels ($38.2 million as of March 31, 2025) were collateralized by real estate held through an investee. On January 31, 2025, the Company made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Company’s Series B bonds. The Series Bonds principal payments range from January 2026 to February 2029 with interest rates of 4.43% to 10.50%. The deeds of trust that govern the terms of the Series Bonds contain various financial covenants. As of March 31, 2025, the Company was in compliance with all of these financial debt covenants.
The Series B bonds contain the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 475 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million; and (iv) the consolidated scope of the projects for development of the Company shall not exceed 10% of the adjusted balance. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series B bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) the Adjusted
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
Additional Information
U.S. dollars in thousands
NOI was $54.3 million for the trailing twelve months ended March 31, 2025; and (iv) the consolidated scope of projects was $0 as of March 31, 2025.
The Series C bonds contain the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) and the Loan to Collateral Ratio shall not exceed a rate of 75%. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series C bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) and the Loan to Collateral Ratio as of March 31, 2025 was 49%.
The Series D bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million. As of March 31, 2025, the Company was in compliance with all covenants under the deed of trust of the Series D bonds; (i) Consolidated Equity Capital of the Company as of March 31, 2025 was $517.5 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 69%; (iii) and the Adjusted NOI was $54.3 million for the trailing twelve months ended March 31, 2025.
Loan Agreement
In February 2025, the Company entered into an $8.0 million unsecured loan agreement with Pacific Oak Strategic Opportunity Limited Partnership, the Company’s sole owner. The loan carries an annual interest rate of 12% and has an initial maturity in May 2025, with an available 90-day extension exercisable by the Company.
NOTE 3: SUBSEQUENT EVENT
The Company evaluates subsequent events up until the date the consolidated financial statements are issued.
7